Purchasing a home is likely to be the largest investment you make in your lifetime – so when you are ready to sell, it is important for you to understand the process of doing so.
In this blog post, we will discuss the first five things to consider when selling your home:
While hiring a realtor is not a legal requirement to selling a home, the benefits of doing so may outweigh the costs. They are experienced in the field of real estate and may be able to offer insight into how to market a home, are likely to have contacts with potential buyers, and will deal with any negotiations that may arise with respect to the selling price. Given that realtors are provided with a set commission rate, they are incentivized to sell the home at an above-average value.
If the Seller chooses to hire a realtor, they realtor will ask the Seller to sign a Listing Agreement. This is an agreement that establishes the realtor’s commission...
It is this premise that serves as the foundation for determining how funds will be distributed in a joint bank account. The exact definition of “intent” becomes an issue when a parent holds a joint bank account with their child – let us explain:
Parents may hold a bank account jointly with their children because:
While the right of survivorship is presumed when spouses hold a joint account – in other words, the account is recognized as a gift – there is no such presumption for an account held between a parent and child. For the surviving child to be entitled to the account, they must establish the parent’s (the transferor’s) intent to provide them with this right. Both parties depositing funds into the...
The right of survivorship is a convincing attribute of joint ownership. The law states that when one of the joint owners passes away, the surviving joint owner(s) will automatically obtain the deceased person’s share. Accordingly, the asset would flow outside of the deceased person’s estate. If an asset flows outside of an estate, it will not be included in the overall value of the estate that is subsequently used to determine probate fees. While this may seem like a good idea at face value, the risks outweigh the benefits – especially in Alberta, which levies a flat probate fee that currently caps at a maximum of $525.
Let us explain:
These days, blended families are more common than the traditional nuclear family. As a grandparent who has step-grandchildren, you may wish to understand who will inherit should you leave a portion of your estate to your “grandchildren”, or should you provide in your Will that if your child pre-deceases you, their share will go to “the deceased child’s children”.
In Alberta, step-grandchildren are not automatically included in a Will. Unless you or your child adopts a step-grandchild, they are generally not treated as a member of your family from a legal perspective. As a result, unless step-grandchildren are explicitly included in your Will, they will not inherit.
Some grandparents wish to include their step-grandchildren as fully as their biological or adopted grandchildren, and others prefer to leave their step-grandchildren out of their Will. It is entirely up to you and will likely depend greatly on your...
Each blended family is unique. Maybe your second marriage happened later in life, after your children and your spouse’s children became adults; as a result, maybe you don’t want to include your stepchildren in your Will. On the other hand, you may have a very close relationship with your stepchildren, having raised them as if they were your own. In this case, you may very much want to ensure that they get to share in your estate when you die.
If you DO want to provide a stepchild with a share of your estate, it is crucial that you make a Will. The current law in Alberta is such that if you die without a will, your stepchildren will have no claim to your estate as they will not fall under the definition of “descendants” set out in the legislation. The law does not take into account how close you may have been with your stepchildren or how long you were involved in raising them.
If you don’t have a Will, your stepchildren will get...
The number of Albertans looking to purchase a vacation property is growing every year... and that’s not surprising! There is nothing better than owning a chalet for weekend ski trips, or a house in Palm Springs, or a place on the golf course in Phoenix. However, if you own a vacation home, you need to ensure that you have taken it into consideration when you are making your Will and planning your estate.
Something that many families fail to consider is how the location of a vacation property can impact their estate planning. This is an important consideration because the way that you protect and pass on your vacation property will depend on the applicable laws in the country or province where the property is located.
For example, by owning property in the USA, your estate will be liable for both US and Canadian estate taxes. Further, by owning property in the USA, you will have two estates that will need to be settled, adding considerably to the amount of...
Our office takes many of phone calls from executors who are worried that they will be held liable for their deceased parent or children's debts. In most these cases the deceased owed more money then they had in assets and was essentially bankrupt. There are three general rules that all Alberta Executors and Administrators must follow when they are administering an estate. The three general rules concerning executors liability that every executor should be aware of are:
Many Albertans have fond memories of spending long summer days at the family cabin with parents, siblings, cousins, grandparents, and aunts and uncles – and their intention is usually that future generations will be able to enjoy this family cabin experience as well. As a result, passing on the family cabin is often a priority when creating an estate plan. Unfortunately, complications may arise, both tax and otherwise, that can create challenges.
Whether you decide to transfer the cabin while you are still living or as part of your children’s inheritance, capital gains tax will be owing to the extent of any increase in the value of the property. Some people try to get around these issues by listing their children’s names on the title to the property, but this too can create significant financial and emotional issues for families.
Some of these issues are as follows:
The following is excerpted from No Thanks Mom: The Top Ten Objects Your Kids Do NOT Want (and what to do with them) by Elizabeth Stewart.
In the following list of the Top Ten Objects Your Kids Do Not Want — inspired by conversations (or lack thereof) about my keepsakes with my 30-year-old son, Lock, and his wife, as well as by similar conversations I’ve had with hundreds of boomer clients and their millennial heirs — I will help you find a remedy for dealing with each:
Unless your grown kids are professors, they don’t want your books. There are a couple common mistakes my clients make in valuing books:
The 17th-century books are likely to be theological or grammar-based, and are not rare. The 19th-century books are probably not in good condition, and since most came in a series or set, it’s unlikely you’ll have a full (valuable) set.
Remedy: If you think the book is relatively common plug the title, author, year of...
WHEN NOT TO BE AN EXECUTOR
Many people feel honoured when they are asked to be the Executor for a friend or family member’s estate. When someone asks you to be their Executor it feels terrific; they are indicating that they believe you to be trustworthy and have good judgement. For many of us, this gives us a great feeling of pride, and we want to fulfil our duties to the best of our abilities. Sadly, many people discover that it is much more difficult than they realized. In my experience, many Executors find they do not have the time, or the skill set to perform the duties or worse, and they attempt to deal with the estate and run into problems and often, legal issues.
The job of being an Executor comes at the worst possible time. You are exhausted, in the process of grieving the loss of a loved one and while you are not in the right mental spot you still must deal with some complex and sometimes sensitive issues. Add in family dynamics, poor communication...